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  • CESTAT Chennai Clarifies Law on Validity of DEPB Licences for Innocent Buyers

    CESTAT Chennai Clarifies Law on Validity of DEPB Licences for Innocent Buyers

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 22.08.2025

    CESTAT Chennai Clarifies Law on Validity of DEPB Licences for Innocent Buyers​ ​ ​

    On August 21, 2025, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Chennai, delivered a significant judgment in Customs Appeal Nos. 40971 and 41142 of 2015. ​ This decision, involving The India Cements Ltd. and Seshasayee Paper and Boards Ltd., has far-reaching implications for importers who unknowingly purchase duty entitlement scrips obtained fraudulently by the original license holders. ​

    Background of the Case

    The appeals arose from Order-in-Original No. ​ 144/2015 issued by the Commissioner of Customs, Chennai. ​ The case revolved around the fraudulent acquisition of DEPB (Duty Entitlement Pass Book) licenses by CEEAN Commerce (P) Ltd., Kolkata, which were later sold to innocent transferee importers, including the appellants. ​ These licenses were used to avail customs duty exemptions during imports. The Customs authorities, after investigation, alleged that the licenses were obtained through misrepresentation and fraud. ​ Consequently, they demanded duty along with interest and imposed penalties under Section 114A of the Customs Act, 1962. ​ Aggrieved by this decision, the appellants approached the Tribunal.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Source: CESTAT Chennai

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  • Gujarat High Court allows IGST Refund against Advance Authorization Exports says Rule 96(10) removed for good

    Gujarat High Court allows IGST Refund against Advance Authorization Exports says Rule 96(10) removed for good

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 21.08.2025

    Gujarat High Court allows IGST Refund against Advance Authorization Exports says Rule 96(10) removed for good ​ ​ ​ ​ ​ ​

    The Gujarat High Court recently delivered a significant judgment addressing the omission of Rule 96(10) of the Central Goods and Services Tax (CGST) Rules, 2017, and its implications for exporters seeking refunds of Integrated Goods and Services Tax (IGST) paid on exports. This ruling has far-reaching consequences for businesses engaged in international trade and clarifies the legal position on pending refund claims.

    Background of Rule 96(10)

    Rule 96(10) of the CGST Rules was introduced to restrict exporters from claiming refunds of IGST paid on exports if they availed benefits under certain exemption notifications for duty-free procurement of inputs. ​ This rule aimed to prevent exporters from enjoying “double benefits”β€”duty-free procurement and IGST refunds. ​ However, exporters faced significant challenges due to this restriction, especially when only a small portion of their inputs were procured duty-free.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Source: Gujarat High Court

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  • CESTAT Delhi Quashes Penalty on Bentley Motors in Customs Valuation Dispute

    CESTAT Delhi Quashes Penalty on Bentley Motors in Customs Valuation Dispute

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 21.08.2025

    CESTAT Delhi Quashes Penalty on Bentley Motors in Customs Valuation Dispute ​ ​ ​ ​ ​ ​

    In a significant decision, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), New Delhi, has set aside the penalty of Rs. 20,00,000/- imposed on M/s Bentley Motors Ltd. under Section 112(a)(ii) of the Customs Act, 1962. ​ The case revolved around allegations of undervaluation of imported Bentley cars by their Indian dealer, M/s Exclusive Motors Pvt. Ltd., and the subsequent evasion of customs duty. ​

    Background of the Case

    The Directorate General of Revenue Intelligence (DRI) had initiated an investigation into the import of Bentley cars by Exclusive Motors, alleging that the dealer undervalued the cars by not including additional payments made to Bentley Motors through supplementary invoices. ​ These supplementary invoices were reportedly issued when cars were transported by air instead of by ship, leading to additional freight costs. ​

    The Commissioner of Customs, ICD Patparganj, New Delhi, had earlier confirmed the demand for differential customs duty of Rs. ​ 71.74 crore along with interest and imposed penalties on Exclusive Motors, its Managing Director, National Sales Manager, and Bentley Motors. While the appeals of the other three noticees were allowed by the Tribunal in November 2024, Bentley Motors’ appeal was heard separately.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Source: CESTAT Delhi

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  • CESTAT Kolkata Overturns Gold Confiscation

    CESTAT Kolkata Overturns Gold Confiscation

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 21.08.2025

    CESTAT Kolkata Overturns Gold Confiscation​ ​ ​

    In a pivotal judgment, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata, has quashed the confiscation of 20 gold biscuits weighing 3320 grams and a Maruti van, along with penalties imposed on two appellants. ​ This case, which revolved around allegations of gold smuggling, has set a significant precedent in the interpretation of the Customs Act, 1962, particularly concerning the burden of proof and the legality of seizures. ​

    The Case at a Glance

    On July 24, 2015, personnel from the 24th Assam Rifles intercepted a Maruti van on the Imphal-Moreh highway and discovered 20 gold biscuits hidden in a secret compartment. ​ The gold, valued at β‚Ή83,00,000, was suspected to be of foreign origin and handed over to Customs Preventive officers. ​ The driver claimed he was merely transporting the gold for an unknown individual. ​ Subsequently, Appellant, a registered jeweler, claimed ownership of the gold, presenting tax invoices from M/s Sangham Diamonds Pvt. ​ Ltd., Mumbai, as evidence of lawful purchase. ​

    The Customs authorities, however, alleged that the gold bore foreign markings (“THOON”) and was smuggled into India. ​ They confiscated the gold and the vehicle under Sections 111(b), 111(d), and 115(2) of the Customs Act, 1962, and imposed penalties of β‚Ή8,00,000 each on the appellants.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Source: CESTAT Kolkata

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  • CESTAT Kolkata- Quicklime Classified under CTH 25221000

    CESTAT Kolkata- Quicklime Classified under CTH 25221000

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 20.08.2025

    CESTAT Kolkata- Quicklime Classified under CTH 25221000 ​ ​ ​ ​ ​

    In a significant win for M/s. ITC Limited, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Kolkata, has ruled in favor of the appellant in Customs Appeal Nos. 75117 and 75118 of 2022. ​ The case revolved around the classification of imported goodsβ€”Quicklimeβ€”under the Customs Tariff Act, 1985. ​ The Tribunal’s decision has reaffirmed the correct classification of Quicklime under Customs Tariff Item No. ​ 2522 1000, bringing clarity to an issue that has been contested for years. ​

    Background of the Case

    The dispute arose when ITC Limited imported consignments of Quicklime and sought to classify them under Chapter Sub-Heading 2522 1000. ​ However, the Assessing Officer reclassified the goods under Chapter Sub-Heading 2825 9090, leading to a higher duty liability. ​ ITC Limited paid the duty under protest and subsequently challenged the assessment before the Commissioner of Customs (Appeals), who rejected their appeals. Aggrieved by this decision, ITC Limited approached the CESTAT Kolkata.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Source: CESTAT Kolkata

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  • CESTAT Chennai- Reimbursements for actual expenses incurred by overseas branches are not taxable

    CESTAT Chennai- Reimbursements for actual expenses incurred by overseas branches are not taxable

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 20.08.2025

    CESTAT Chennai- Reimbursements for actual expenses incurred by overseas branches are not taxable ​ ​ ​

    The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Chennai, recently delivered a significant judgment in the case of MRF Ltd. v. Commissioner of Central Excise and Service Tax. This decision, pronounced on August 19, 2025, addresses the contentious issue of service tax liability on reimbursements made to overseas branch offices under the reverse charge mechanism. The ruling provides clarity on the interpretation of Section 66A of the Finance Act, 1994, and its implications for businesses with international operations. ​

    Background of the Case

    MRF Ltd., a leading tire manufacturer, operates branch offices in Australia, Dubai, Vietnam, and Sri Lanka. ​ During an audit in 2013, the Department of Central Excise and Service Tax observed that expenses incurred by these overseas offices were reimbursed by the Indian head office. ​ The Department contended that these reimbursements constituted “business support services” under Section 66A of the Finance Act, 1994, and demanded service tax of Rs. 58,38,707/- along with interest and penalties. ​

    MRF challenged this demand, arguing that the overseas branches were not separate legal entities but extensions of the same company. ​ They contended that reimbursements for expenses like salaries, rent, and office supplies could not be classified as taxable services.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Source: CESTAT Chennai

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  • CESTAT Ahmedabad Partially Relaxes Provisional Release Conditions in SEZ Import Dispute

    CESTAT Ahmedabad Partially Relaxes Provisional Release Conditions in SEZ Import Dispute

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 19.08.2025

    CESTAT Ahmedabad Partially Relaxes Provisional Release Conditions in SEZ Import Dispute ​ ​ ​ ​

    In a significant ruling, the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), West Zonal Bench at Ahmedabad, has partially relaxed the conditions imposed by the Commissioner of Customs, Kandla, for the provisional release of goods seized from a Special Economic Zone (SEZ). The case, involving H.R. ​ Enterprises, highlights the complexities of customs law, SEZ regulations, and the balance between safeguarding revenue and ensuring fair treatment for importers.

    Background of the Case

    H.R. Enterprises, an importer of goods, had brought in 16 consignments of fabrics declared as “leftover of tarpaulin fabrics mix size and GSM” from China. ​ These goods were stored in the warehouse of M/s. ​ Cargo Care Agency, a SEZ unit in Kandla. ​ However, the Directorate of Revenue Intelligence (DRI) flagged the consignments, alleging misdeclaration of the goods’ nature and classification. ​ Following an investigation, the Customs Department seized the goods, citing potential misclassification and undervaluation, which could lead to revenue loss. ​

    The Commissioner of Customs allowed provisional release of the goods but imposed stringent conditions, including:

    1. Submission of a bond equal to the value of goods (β‚Ή1.93 crore). ​
    2. Submission of a bank guarantee of β‚Ή3.12 crore, covering the differential duty and potential penalties. ​

    H.R. Enterprises challenged these conditions before the Tribunal, arguing that they were onerous and would cripple their business.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Source: CESTAT Ahmedabad

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  • CAAR Delhi Upholds Classification and Exemption for Mobile Phone Components

    CAAR Delhi Upholds Classification and Exemption for Mobile Phone Components

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 19.08.2025

    CAAR Delhi Upholds Classification and Exemption for Mobile Phone Components ​ ​

    The Customs Authority for Advance Rulings (CAAR), New Delhi, recently issued a significant ruling concerning the classification and exemption of certain goods intended for use in the manufacturing of mobile phone parts. ​ This ruling, dated August 6, 2025, provides clarity on the classification of specific items under the Customs Tariff Act, 1975, and their eligibility for exemption under Notification No. 57/2017-Customs. Below, we delve into the details of the ruling and its implications for importers and manufacturers. ​

    Background

    M/s Le Mei Plastic Manufacturing Private Limited filed an application seeking an advance ruling on the classification and exemption of goods such as aluminum plates, magnesium alloy sheets, heat-dissipating films, silicon pads, conductive foams, antennas, double-sided tape, and dust-proof paper. ​ These goods are intended for use in the manufacturing of intermediate components (front, middle, and back covers) for smartphones. ​

    The applicant argued that these goods are specifically designed for mobile phone manufacturing and should be classified under Tariff Heading 8517 79 90 as “Parts of Mobile Phones.” ​ Additionally, they sought confirmation on whether these goods qualify for exemption under Entry 6E of Notification No. ​ 57/2017-Customs.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Source: CAAR Delhi

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  • Karnataka High Court Upholds Conversion of Shipping Bills from MEIS to DEPB Scheme

    Karnataka High Court Upholds Conversion of Shipping Bills from MEIS to DEPB Scheme

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 18.08.2025

    Karnataka High Court Upholds Conversion of Shipping Bills from MEIS to DEPB Scheme​

    In a significant judgment delivered on July 30, 2025, the High Court of Karnataka at Bengaluru dismissed Customs Appeal No. 4 of 2022 filed by the Principal Commissioner of Customs, Bengaluru. ​ The case revolved around the conversion of shipping bills under export promotion schemes, and the court upheld the decision of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Bengaluru, in favor of the Assessee, M/s Louverline Blinds. ​

    Background of the Case

    M/s Louverline Blinds, engaged in the manufacture of motorized curtain and blind assemblies, imported inputs under an Advance Authorization License for manufacturing goods meant for export. ​ The Assessee filed six shipping bills under the Merchandise Export Incentive Scheme (MEIS) but later sought to amend them to reflect exports under the Advance Authorization License. The Principal Commissioner of Customs rejected this request, citing Section 149 of the Customs Act, 1962, and Circulars No. ​ 36/2010 and 6/2002. ​

    The Assessee appealed to the CESTAT, which ruled in its favor, allowing the conversion of shipping bills from the MEIS Scheme to the Duty Entitlement Passbook (DEPB) Scheme. ​ The Revenue challenged this decision in the High Court.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Source: Karnataka High Court

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  • Delhi High Court Orders Release of Confiscated Gold Chain

    Delhi High Court Orders Release of Confiscated Gold Chain

    ALO Law Office- IDT Tax I Arbitration I Litigation

    Date: 18.08.2025

    Delhi High Court Orders Release of Confiscated Gold Chain ​ ​ ​ ​

    In a significant ruling on August 7, 2025, the High Court of Delhi addressed the contentious issue of gold jewelry confiscation by customs authorities, setting a precedent for the treatment of personal effects under Indian law. ​ The case involved Appellant, a senior citizen and foreign national from Turkmenistan, who had traveled to India for medical treatment. Upon her arrival at Indira Gandhi International Airport on July 16, 2024, customs officials detained her gold chain (weighing 132 grams) and gold bracelet (weighing 66 grams), citing violations of customs regulations. ​

    Background of the Case

    Appellant filed a petition under Article 226 of the Constitution of India, seeking the release of her confiscated gold items. ​ While the Customs Department allowed her to redeem the gold bracelet upon payment of a fine and penalty, the gold chain was subjected to absolute confiscation. ​ This distinction between the two items raised questions about the legality and rationale behind the customs authorities’ actions.

    This Article has been written by Shri Ravi Shekhar Jha, Advocate Delhi High Court based on his interpretation of the law. He can be reached at his email id intelconsul@gmail.com or on his Mobile +91-9999005379.

    Source: Delhi High Court

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